Large discount stores and superstores can wield enormous power and impact on a local community.
When a megaretailer like Wal-Mart enters a town, especially a smaller one, it often drives nearby small
retailers out of business and sends downtown business districts into a nosedive. Wal-Mart has been the
target of much criticism for this. When Wal-Mart founder Sam Walton was alive, he responded as
follows: “Quite a few smaller stores have gone out of business during the time of Wal-Mart’s growth.
Some people have tried to turn it into this big controversy, sort of a “Save the Small Town Merchants”
deal, like they were whales or whooping cranes or something that has the right to be protected. Of all
the notions I’ve heard about Wal-Mart, none has ever baffled me more than this idea that we are
somehow the enemy of small-town America. Nothing could be further from the truth. Wal-Mart has
actually kept quite a number of small towns becoming extinct by saving literally billions of dollars for the
people who live in them, as well as by creating hundreds of thousands of jobs in our stores. I believe
millions of people are better off today than they would have been if Wal-Mart had never existed. I don’t
want to be too critical of small-town merchants, but the truth is that a lot of these folks just weren’t
doing a very good job of taking care of their customers. Whenever we put a Wal-Mart store into a town,
customers would just flock to us from the variety stores. With our low prices, we ended an era of 45
percent mark ups and limited selection. We shut the door on variety-store thinking.”
a. What is your assessment of Sam Walton’s remarks?
b. Does Wal-Mart have a responsibility to the small retailers it outs out of business? Why?
c. What does the future look like for small retailers in America? How can they compete with
retailing giants like Wal-Mart?

Answer rating: 100% (QA)

a From his viewpoint WalMarts entry into small towns was a boon to the people who live there because ... View the full answer